Factors influencing implementation of blue ocean strategy on performance of commercial banks in Kenya

Abstract

Commercial banks' financial performance is solely based on the profits provided by their operations' assets, but their loan portfolio is a highly valuable asset that, regrettably, exposes the organization to financial hazards. With increased competition, the goal of the management innovation technique known as "blue ocean" is to increase the effectiveness of corporate processes. The purpose of this study was to establish the scope of influence of on certain factors on the blue ocean strategy financial performance of commercial banks in Kenya banks. The study specifically aimed to; establish the effect of strategic leadership on the implementation of blue ocean strategy in and its influence on organization performance in commercial banks in Kenya ; assess the influence of core competencies on the implementation of blue ocean strategy on organization performance of commercial banks in Kenya and to determine the effect of organizational structure on the implementation of blue ocean strategy on organization performance of commercial banks in Kenya. The study adopted descriptive research design survey of all the 38 licensed commercial banks in Kenya at 2024.The study was premised on the research based theory,Competency based theory,Miles and snow based theory, Porters competitive theory and the Value innovative theory in its theoritical reviews. Through the use of questionnaires, the study collected primary data. In each of the commercial banks, the researcher distributed the questionnaires to the first line, middle level, and top level managers. Four commercial banks that were not included in the main study participated in a pilot test to evaluate the validity and reliability of the research tool. Statistical Package for Social Scientists (SPSS) was used to evaluate inferential statistics, whereas descriptive statistics (mean, standard deviation, and frequencies) were used to analyze the majority of the quantitative data that needed to be gathered for this study. The findings were presented using tables and charts. Ethical consideration was adhered to when carrying out the study. The results of the study showed that strategic leadership and the commercial bank performance had a moderately favorable and statistically significant association (r = 0.549; p < 0.05). There was a statistically significant and moderately favorable association (r = 0.483; p < 0.05) between core competencies and performance of commercial banks. There was a statistically significant and moderately favorable association (r = 0.497; p < 0.05) between organization structure and performance of commercial banks. The researcher recommends that organizations should have a visionary strategic leadership to enhance performance. The study recommends that organizations should consider core competencies on blue ocean strategy implementation to enhance organization performance. This study should be replicated in other Kenyan businesses to improve comparability and application in other economic sectors.